ETV Motors, an Israeli company developing alternative powertrains for hybrid-electric vehicles, has raised $12 million in a first round of funding to fuel further research. If successfully launched, its “micro-turbine” technology could be disruptive, causing plug-in hybrid-electric vehicle (PHEV) makers to abandon the internal combustion engines they have long relied upon.

Basically, the company has miniaturized airplane turbines, which produce both heat and electricity, yet are lighter and more compact than normal gas-powered engines. It claims these devices can charge the lithium-ion batteries used in PHEVs more quickly and efficiently, allowing the vehicles to drive much farther than standard engine models allow. ETV is still modifying its prototype, but says it should have a fully functional model making the rounds by next year. In the meantime, it is also working on its own 4.7-volt lithium-ion battery.

The company’s timing is on point for now, with major automakers like General Motors, Mitsubishi and Toyota planning to roll out PHEVs of their own by the end of 2010. Whether or not it will seek deals with these names or others right away is unclear, though it says it will probably launch with commercial fleets of vehicles at first.

Another company working on microturbine technology, Adura Systems, recently emerged from stealth mode, announcing plans to deploy its powertrains in fleets of buses in China with the help of the China Automotive Technology and Research Center. Eventually, the Menlo Park, Calif.-based company plans to market its products to car and truck makers in the U.S., but that’s still a ways away.

ETV’s recent round of funding was led by Quercus Trust, and included 21 Ventures. It will be doled out as ETV hits research and product development milestones over the next several years. Incidentally, Quercus has also invested in the company’s indirect competitor, Odyne, which is also working on alternative propulsion systems for hybrid trucks and buses